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Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic -Notice 2020-18


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4/13/2020
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As your attorneys, Fazzio Law is committed to managing your legal matter as well as keeping you informed to breaking legal news as our nation faces the COVID-19 pandemic.

            To aid the American taxpayer, the United States Treasury Department has been implementing emergency regulations including extending the filing deadline extension to July 15 from April 15, waiving interest and penalties during the national state of emergency, and waiving tax payments until July 15.[1]

            The Treasury Department’s latest Notice contains the following language:

Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic

Notice 2020-18 

The Emergency Declaration instructed the Secretary of the Treasury “to provide relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency, as appropriate, pursuant to 26 U.S.C. 7508A(a).” Pursuant to the Emergency Declaration, this notice provides relief under section 7508A(a) of the Internal Revenue Code (Code) for the persons described in section III of this notice that the Secretary of the Treasury has determined to be affected by the COVID-19 emergency. This notice supersedes Notice 2020-17.[2]

            While guidance has been published providing the relief described above, the IRS has extended filing deadlines and waived interest, penalties, and estimated tax payments until July 15, 2020. 

            As of March 25, 2020, the IRS has officially published guidance on all collection alternatives including Currently-Not-Collectible (“CNC”), Installment Agreements (“IA”), and Offer-in-Compromise (“OIC”).

Traditionally, even in the case of an economic hardship, the process for temporarily halting an established installment agreement requires a certain threshold of time and several levels of approval. Please note that these changes are underway and as of the March 25, 2020, have not been formally entered. The following proposals will take effect from April 1, 2020 to July 15, 2020:

  1. Installment Agreement
    1. Existing Installment Agreements –For taxpayers under an existing Installment Agreement, payments due between April 1 and July 15, 2020 are suspended. 
      1. Taxpayers who are currently unable to comply with the terms of an Installment Payment Agreement, including a Direct Deposit Installment Agreement, may suspend payments during this period if they prefer. 
      2. Furthermore, the IRS will not default any Installment Agreements during this period. By law, interest will continue to accrue on any unpaid balances.
    2. New Installment Agreements – The IRS reminds people unable to fully pay their federal taxes that they can resolve outstanding liabilities by entering into a monthly payment agreement with the IRS. 

 

  1. Offer-In-Compromise
    1. Pending OIC applications – The IRS will allow taxpayers until July 15 to provide requested additional information to support a pending OIC. In addition, the IRS will not close any pending OIC request before July 15, 2020, without the taxpayer's consent.
    2. OIC Payments – Taxpayers have the option of suspending all payments on accepted OICs until July 15, 2020, although by law interest will continue to accrue on any unpaid balances.
    3. Delinquent Return Filings - The IRS will not default an OIC for those taxpayers who are delinquent in filing their tax return for tax year 2018. However, taxpayers should file any delinquent 2018 return (and their 2019 return) on or before July 15, 2020.
    4. New OIC Applications– The IRS reminds people facing a liability exceeding their net worth that the OIC process is designed to resolve outstanding tax liabilities by providing a "Fresh Start." 

 

  1. Liens and Levies
    1. Field Collection Activities - Liens and levies (including any seizures of a personal residence) initiated by field revenue officers will be suspended during this period. However, field revenue officers will continue to pursue high-income non-filers and perform other similar activities where warranted.
    2. Automated Liens and Levies – New automatic, systemic liens and levies will be suspended during this period.

 

  1. Passport Certification
    1. Passport Certifications to the State Department – IRS will suspend new certifications to the Department of State for taxpayers who are "seriously delinquent" during this period. These taxpayers are encouraged to submit a request for an Installment Agreement or, if applicable, an OIC during this period. Certification prevents taxpayers from receiving or renewing passports.

 

  1. Private Debt Collections
    1. Private Debt Collection – New delinquent accounts will not be forwarded by the IRS to private collection agencies to work during this period.

Again, if you are facing a situation that necessitates this action, please reach out and consult with our attorneys before acting.

As we continue to face COVID-19 as a nation, our office is ready, willing, and able to provide guidance.
 

[1]See generally https://www.irs.gov/pub/irs-drop/n-20-18.pdf

[2]Id.



Category: COVID-19 Relief Law

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